Regency Fincorp Ltd Management Discussions

1. Industry Structure and Developments:

The Financial Year 2023-24 began with an expectation that we would soon see GDP surpass the pre-pandemic level of the Financial Year 2019-20. That has just about been the case. Despite the recovery, we as a nation have still lost two years of GDP growth.

The Second Advance Estimates of National Income for the year 2023-24 and quarterly

GDP estimates for the quarter October-December, 2023 (Q3 2023-24), along with First

Revised, Second Revised and Third Revised Estimates of National Accounts for the years 2022-23, 2021-22 and 2020-21 respectively was released on 29 February, 2024.

Indias per capita net national income (at current prices) for 2023-24 stands at INR 1,70,34,386, according to estimates from the National Statistical Office (NSO). This marks an almost 100 percent increase from the per capita income in 2014-15 INR 86,647 when the Narendra Modi government first came to power.

When accounting for constant prices [2011-12 prices], Indias per capita Net National Income (NNI) (in real terms), increased by about 35 percent from INR 72,805 in 2014-15 to INR 98,118 in 2022-23.

NNI is an indicator of the total economic activity in a country, and is defined by the OECD as gross national income minus the depreciation of xed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence.

The below table from the NSO shows Indias per capita gross domestic income (GDP), per capital gross national income (GNI), and the per capita private financial consumption expenditure (PFCE) at 2011-12 prices between 2020-21 and 2022-23.

Per Capita Income, Product, and Final Consumption Second Advance Estimates of National Income and Expenditure Components of GDP, 2023-24 (at 2011- 12 Prices)

Item	2021-22	2022-23	2023-24	Percentage change over previous year
	(Second Revised Estimates)	(First Revised Estimates)	(Second Advanced Estimates)	2022-23	2023-24
Population (in million)	1369	1383	1395	0.86%	-
Per capita GDP (INR)	1,09,762	1,16,216	1,23,945	5.90%	6.70%
Per capita GNI (INR)	1,08,345	1,14,478	1,22,110	5.70%	6.70%
Per capita NNI (INR)	94,054	99,404	1,06,134	5.70%	6.80%
Per capita PFCE (INR)	63,807	67,423	68,857	5.70%	2.10%

the production costs remain high, due to global uncertainties among other factors, companies in most industries are passing on higher spending to nal consumers to preserve earnings margins.

This is why India is currently witnessing a K-shaped economic recovery post-pandemic as consumption is slowing down and household savings decline. Wage growth is also under pressure in the lower half of the income pyramid.

The RBI, meanwhile, is attempting to rein in the in ation with policy rate hikes.

CPI in ation is projected at 5.4 per cent for 2023-24, with Q2 at 6.2 per cent, Q3 at 5.7 per cent and Q4 at 5.2 per cent, with risks evenly balanced.

As the government pursues redistributive policies, results need to be delivered on equitable access to healthcare, quality education, and jobs. Often, numbers get in ated during time of release near elections and budget season as welfare programs incentivize short term gigs.

Size of Indias economy fifth in the world

Still, in absolute terms, India remains a bright spot on the world stage, as it grows steadily from a relatively low base. Last year, India overtook the UK to become the worlds fth biggest economy, after the US, China, Japan. and Germany.

Multiple initiatives to ease doing business and expand the manufacturing share of the economy as well as the push for skill development offers promise to convert Indias human capital into a talent base that feeds higher quality development. According to its central bank, the Reserve Bank of India, at current prices and exchange rates, India is estimated to be US$ 5 trillion economy in 2024-25, remaining fth in the world standings.

2. Opportunity and Threats: Opportunities

Our long-standing relationship with our major customers has been one of the most significant factors contributing to our growth. Our commitments to quality and customer service practices have been strong contributing factors to our robust customer relations. Over the years, we have steadily developed a robust base of customers for our products in national level.

To overcome the challenges and competition, we have taken various initiatives to reduce the operational costs, to develop new value added products, improve the performance and quality of existing value-added products as well as to explore new markets domestically and globally.

The digitization, unparalleled expertise and an excellent corporate strategy has resulted in an unprecedented growth of the company over the years. We have an experienced and dedicated team of professionals, catering to the needs of clients, delivering products at reasonable interest rates& timely.

Threats:

? Change in Policy and Regulations.

? New entrants in the market and intense competition by existing players

? Technology may become obsolete due to Innovation in Technology

3. Risk Management and Concerns:

Risk Management forms an integral part of your Companys operations. Your Company continues to focus on a system based approach to business risk management. It broadly involves identi cation & potential risks, their analysis and impact as also risk mitigation initiatives to address the same. The Board of Director of the Company oversees the risk management Process.

4. Recent Trend and Future Outlook:

NBFCs have become important constituents of the financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. NBFCs are leveraging their superior understanding of regional dynamics and customized products and services to expedite financial inclusion in India. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India. NBFCs have demonstrated agility, innovation, and frugality to provide formal financial services to millions of Indians.

This is an enviable track record despite the business models of the NBFCs being severely tested by four large external events in the last few years, namely, (i) demonetization, (ii) GST implementation, (iii) failure of few large NBFCs, and (iv) the pandemic. The fact that many NBFCs have managed to overcome these stresses without significant impact on financial position is a testimony to their resilience and agility.

Financial institutions play a crucial role in ensuring economic stability for households and businesses at critical junctures. The pivotal role of NBFCs in driving sustainable scal growth is well recognized, given their last-mile connectivity and agile system. The sector has played a decisive role in accelerating last-mile funding and understanding the credit requirement of the Unbanked and Underserved. Aided by the governments thrust towards a digital economy, the sector has also undertaken significant digital transformation and invested heavily to become tech-agile institutions offering personalized products and services, ensuring faster credit disbursement.

As India strategizes post-pandemic economic recovery through scal measures and businesses aim to expand capacities, NBFCs have an enormous opportunity to assist in achieving the noble goal of Aatmanirbhar Bharat through the fast-tracked flow of credit to businesses and households. As the latest data on Udyam Portal shows, a significant proportion of registered businesses are micro businesses, Union budget 2023-24 offers an opportunity to bring in a targeted scheme for expanding credit to micro businesses.

We believe that NBFCs with superior capital adequacy, better margins, frugal cost management, prudent risk management and those incorporating above four key cornerstones in their business models will continue to deliver sustainable growth in the foreseeable future.

5. Internal Control Systems and their Adequacy:

The Company has adequate systems of internal Controls commensurate with its size

and operations to ensure orderly and efficient conduct of business.

6. Financial Performance with respect to operational performance:

The Financial performance of the Company for the year 2023-24 is described in the Directors Report under the head operations.

6. Material developments in Human Resources/Industrial Relations front, including the number of people employed:

The Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resources and overall development.

7. Cautionary Statement:

Statement in this Management Discussion and Analysis Report, Describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

	For and on behalf of the Board of Directors
	Regency Fincorp Limited
Place: New Delhi
Date: 10 May 2024
Sd/-	Sd/-
Gaurav Kumar	Vishal Rai Sarin
Managing Director	Whole-Time Director
DIN: 06717452	DIN: 08758350